by Bob Schmidt

Created on: March 20, 2010   Last Updated: April 01, 2010

How Obamacare will affect small businesses is subject to debate in that all details of the proposed legislation have yet to be carefully evaluated. One thing is sure, all businesses will be affected by an added layer of bureaucracy since it became law in the United States.

Raised Labor Costs...

Undoubtedly, labor costs must rise if health insurance is mandated for all employees of businesses above a certain size. Even those businesses that are not required to provide insurance coverage will have to prove their compliance with any change in laws that apply to the business community.

Those businesses that are approaching whatever limits are set by health care laws for mandatory insurance will have to consider the costs of expanding their business labor force. This will result in many smaller businesses capping the overall number of employees for whom they must suffer additional expense.

Since additional forms and tax information will be involved, additional accounting expense will result for all businesses, large or small. All added layers of paperwork, compliance mechanisms, and employee expense will affect the net profits of every business in the country.

Existing Health Care Insurance Costs and Availability...

There is considerable debate on the subject of how existing healthcare insurance costs will be affected. Proponents of Obamacare insist that costs will be reduced in the long run, while detractors to government mandated healthcare insist that healthcare insurance will cost more by necessity. Detractors point out that providing insurance for over 30 million people must raise the cost of insurance premiums. This argument seems to make a lot of sense to most business people.

Eventual Affect of Labor Costs...

It seems logical that most businesses will have to plan for additional expense in the area of labor within their businesses. As healthcare insurance must be provided to all employees, it is a given that employees will still need to make enough net income for survival. That means that business ownership will have to actually pay for the additional healthcare coverage mandated by federal law.

Higher Taxes...

It is also a given that taxes in many areas are likely to increase when the ultimate costs of mandated healthcare are known. Specific tax hikes are unknown at this point in time, but will certainly be a reality. Somehow, funds must be raised to pay for a program that conservative estimates say will cost almost one trillion dollars. The likelihood that other cost savings combined with new taxes can keep that number accurate is questioned.

In Conclusion...

Any new entitlement program will have costs to consider. National healthcare is potentially a program so costly that some claim that it could bankrupt the United States. Truthfully, the national economy has entered areas unknown with recent deficit spending. No one actually has a basis for blind support of additional spending, nor can opponents of Obamacare prove that it will lead to the demise of the United States economy.

What supporters and detractors should be considering is that the cost of healthcare is an important issue that needs attention. If Obamacare, in its present form, is not acceptable; it is time to finally address the issue and begin significant reform to eliminate fraud and escalating costs to American citizens. Any productive resolution to accomplishing this will result in helping our weak economy recover productivity.

America needs more jobs. Any healthcare reforms must facilitate current business economic recovery. Otherwise, further economic distress will result, and no one knows how much more our stressed economy can survive.

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